State-run miner Coal India’s Rs 5,000 crore offer opened for retail investors today, with analysts suggesting that this is a decent opportunity for retail investors to enter into the stock for a long term basis.
The company on Tuesday had announced that the government aims to sell 6.16 crore equity shares , representing 1% of Coal India’s total paid-up equity capital, as the base offer size. The government also retains an oversubscription option to sell an additional 6.16 crore shares, taking the total potential offer size to 12.32 crore shares or 2% equity. At the floor price of Rs 412 per share, this would be worth more than Rs 5,000 crore.
Coal India’s shares crashed sharply by more than 6% on Wednesday morning, as the floor price implied a 10-11% discount from the stock’s current levels. However, the stock soon erased all losses, and closed more than 1% higher at Rs 463.05 apiece on NSE.
The offer for sale opened for non-retail investors on May 27, while retail investors, eligible employees and non-retail investors carrying forward unallotted bids can participate on May 29. In the first day itself, institutional investors put in bids worth about Rs 19,000 crore on the first day of the issue. Non-retail or institutional investors subscribed to more than 45.15 crore shares or over 8 times the shares reserved for them at an indicative price of Rs 436.69 per share, much higher than the set floor price. At this indicative price, bids of over 45.15 crore shares amount to around Rs 19,000 crore.
Out of the total offer size, 10% or around 1.23 crore shares have been reserved for retail investors, subject to valid bids. Additionally, up to 25,000 shares have been reserved for eligible employees of Coal India under the employee reservation category. Eligible employees can bid for shares worth up to Rs 5 lakh.
Should you participate in Coal India’s OFS?
Coal India’s OFS at a floor price of Rs 412 is a decent opportunity for retail investors to enter into the stock for a long term basis, said Narendra Solanki, Head Fundamental Research - Investment Services at Anand Rathi Shares and Stock Brokers. He explained that the company delivered strong financial performance recently. Additionally, the power segment remains the largest end-user for the coal sector, and with rising grid demand, government coal allocation continues to be prioritised towards thermal power plants.
“For FY27, the Ministry of Power has indicated a coal requirement of 906 million tonnes, up from 815 million tonnes in FY26. Shift in generation-mix, combined with elevated peak demand, necessitates thermal plants operating at high PLFs, thereby reinforcing the company’s critical role in the power sector. We expect the company’s coal volume to grow by 7.5% YoY in FY27, with e-auction premium at 47.5% FSA prices,” he added. The brokerage has a ‘Buy’ call on the stock with a target price of Rs 520 apiece. This implies an upside potential of more than 12% from the stock’s previous closing price.
Vishal Periwal, research analyst at PL Capital, also said that the 10% OFS discount creates a tactical entry opportunity, but investors should participate only if they remain constructive on Coal India’s medium-term cash flows and dividends — not for the discount alone.
Also read: Deven Choksey bets big on Coal India’s value unlock story
The newly announced Offer For Sale (OFS) in the company by the government provides an attractive opportunity for investors to ride on the country’s rising power story, said Sunny Agrawal, Head of Fundamental Research at SBI Securities. He highlighted that the company is a strong cash-generating and high dividend yielding PSU backed by India’s energy demand. “The company enjoys a near monopoly position in catering to the country’s coal needs. CIL is well-positioned structurally, given that India remains heavily dependent on coal for electricity generation coupled with continuous rise in power demand,” he added.
However, Agrawal warned that the key limitation is that Coal India is not a high-growth story, given the mature nature of the business and increasing penetration of non-carbon intensive energy alternatives. “Overall, we believe CIL is better suited for investors seeking steady income, strong cash flows, relative downside protection, and higher dividend yields,” he said.
Aditya Welekar, Senior Research Analyst of Metals at Axis Direct, however warned that the stock could see supply-led pressure/arbitrage activity around OFS pricing in the near-term, although strong subscription especially from institutions will be watched out and it would be read positively by the market.
The government owned more than 63% stake in the PSU company, as on March 31, 2026. The share sale by the promoter will be conducted through a separate window mechanism on BSE and the National Stock Exchange in accordance with the Securities and Exchange Board of India’s OFS guidelines.
Coal India share price
Coal India shares have gained more than 1% in one week, 2% in one month and 16% so far in 2026. In the longer term, the stock has gained around 16% in one year, 92% in three years and nearly 221% in five years.
The company currently has a market capitalisation of nearly Rs 2.86 lakh crore. The stock’s P/E ratio stands at over 9.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
